News Briefing: January 6, 2009

ASEAN

Political News
- Thailand will host the ASEAN summit in Bangkok from Feb 27 to Mar 1, 2009. DAAD protestors plan to block any place hosting the ASEAN summit.
- The Thai Cabinet approved 11 documents to be presented at the ASEAN summit. A total of 33 documents will be presented to the Thai Parliament on January 7.
- In accordance with the ASEAN Charter, Singapore became the first member to appoint a Permanent Representative to ASEAN, Lim Thuan Kuan.
- China appointed Xue Hanqin as its first ASEAN ambassador
- ASEAN is exploring the possibility of having the UN train peace-keeping forces from ASEAN. The 3rd ASEAN-UN summit will be held directly after the ASEAN Summit, with a visit by Ban Ki-Moon.
- The ASEAN Muslim Youth association said it would mobilize troops in Indonesia to aid the fighters in Palestine.

Business News
- The Philippines Central Bank announced it would contribute $2 billion to a pool of regional reserves.

BURMA

Political News
- Thailand’s new government is worrying the junta over talk of changing foreign policy to include restricting business dealings and taking a tougher stance on human rights in Burma.
- The junta released 19 North Korean refugees to Thailand after detaining them for a month as illegal immigrants. Observers speculated the long limbo was due to Burmese attempts to renormalize relations with North Korea after severing close ties in the 1980s. The group will eventually get to South Korea.

Business News
- Myanmar exported 150,000 tons or rice in the first three quarters of FY09. Authorities urged farmers to bring more land under cultivation.
- The Information Ministry shut down 11 journals and 20 magazines for failure to renew their registration.
Cambodia

Political News
- Vietnam and Cambodia signed an MOU on inspecting animals crossing the border.

Business News
- Electricité du Cambodge said it will not lower electricity prices until supply can meet demand, noting that it is already losing money on sales. Electricity costs in Cambodia are 4X those of Thailand, accounting for 30% of production costs. Experts seek a cut in the energy tariff rate to ease pressures.
- The Cambodian Parliament approved two Chinese companies to build four hydroelectric dams in Koh Kong province, worth $1 billion.
- HCMC-based Thep Viet Steel Corporation will build a $70 million steel mill in Cambodia in the next three years.

LAOS

Political News
- Laos asked Thailand to repatriate 5,000 Hmong living in Thai refugee camps by June. To the horror of refugee groups, the Thai army has encircled refugee camps ahead of an effort to repatriate Hmong before the PM’s visit to Laos this month.
- Laos to host 17th annual Asia-Pacific Parliamentary Forum Jan. 11-15.

Business News
- Vietnam is the largest foreign investor in Laos, with 52 projects valued at $450 million; the largest share of investment is in hydropower.

INDONESIA

THEMES
Effects of the Financial Crisis
- The government has set aside $4.9 billion for a stimulus package.
- Business groups are demanding that the government include them in discussions on how to best spend the stimulus package in order to ensure their needs are met.
- SBY announced seven priorities that will guide economic policy in 2009, which included protecting the workforce, maintaining growth, and curbing inflation.
- Infrastructure projects are being viewed as a way of mitigating the economic downturn, and to this end the government has set aside $9.95 billion in funds and has started putting out tenders for some projects.
- The central bank expects to be able to cut its interest rate due to an ease in inflation, but will wait to get final inflation numbers for the end of 2008.

End of Year Economic Figures
- The stock market fell 51% in 2008, but capital market regulators and analysts are claiming that the market has hit bottom and will improve in the coming year.
- The economy expanded 6.2% in 2008, slowing slightly from 6.3% in 2007. The government is forecasting 4.5%-5% growth in 2009.
- Inflation in 2008 was 11.4%.
- Foreign investors accounted for the largest portion of investment in the stock market last year, with a 67% share, up from 66% in 2007.
- The Trade Ministry is optimistic that the final export growth figure for 2008 will be between 18% and 20%.
- The tourism industry earned $6.35 billion in 2008.

Coal News
- The South Kalimantan provincial administration plans to mount pressure against Adaro Indonesia to immediately pay overdue tax liabilities on heavy equipment.
- Coal prices are expected to remain around $50 to $60 per ton in 2009 due to a coal production cut.
- Coal output in 2008 is estimated at 225 million tons, up from 217 million tons in 2007, but 2009 output will be unchanged from this year.

ADDITIONAL NEWS
Political News
- The Indonesia Survey Institute (LSI) released a survey from late December showing 23% of respondents prefer the Democratic Party, while 17.1% prefer PDI-P.
- Khofifah’s nominating party, the United Development Party (PPP), reshuffled its provincial chapter chairman in an attempt to win the revote in Bangkalan and Sampang. Musyafak Noor will replace Farid Al Fauzi.
- The government has sent a humanitarian aid mission to the Middle East with medicine and doctors, but it is uncertain whether they will be able to enter Gaza.
- Former House of Representative member Al Amin Nur Nasution was sentenced to eight years imprisonment by the Corruption Court over the development of a protected forest area in South Sumatra.
- The KPK is investigating bank accounts linked to the Manpower and Transmigration Ministry that hold a total of $12.6 million because the use of the money is not in line with its allocation.
- The AGO will appeal the verdict acquitting former spy Muchdi Purwopranjono of all charges in the murder of human rights activist Munir Said Thalib.

Business News
- The government will continue its program to privatize 30 state-owned enterprises this year, scaled back from the original plan to privatize 44 SOEs.
- Pertamina has secured a supply of premium gasoline and diesel following shortages in several gas stations.
- Pertamina has admitted to discriminating against gas stations which do not yet hold the Pasti Pas certificate, meaning they meet service quality standards.
- The government plans to soften WiMax regulations so the local industry will be able to establish partnerships with foreign parties in order to accelerate the transfer of technology process.
- The government is offering additional 3G cellular frequencies to Excelcomindo and Indosat. The price is still being reviewed.
- Telkom expects 2009 revenue to grow by less than 10%, following this year’s trend, due to tighter competition.

MALAYSIA
THEMES
Najib Transition
- Speculation is starting as to who will be the new Defense Minster, with the current favorites being Hishammuddin, Muhyiddin and Shafie Afdal.
- Najib has promised greater government efficiency in the year ahead, as well as reassurances that the government is ready to introduce additional economic stimulus measures if the need arises.

Kuala Terengganu By-Election
- BN announced Wan Farid as the party’s Kuala Terengganu candidate. He has relinquished his senatorship and it is hoped he will be attractive to Chinese voters in the region.
- PAS named Wakaf Mempelam state assemblyman Abdul Wahid Endut as the party’s candidate.
- PKR is intending to use the murder of Altantuya Shaariibuu as ammunition in the Kuala Terengganu by-election, and some have already been arrested for putting up posters regarding the murder.
- Mahathir has criticized Wan Farid as a bad choice and a proxy.
- Wan Farid will be reappointed as a deputy minister if he wins the parliamentary seat.

ADDITIONAL NEWS
Political News
- Mahathir is calling for a boycott of U.S. currency and goods in order to induce pressure to stop supporting Israel.
- Malaysia is contributing $1million worth of relief supply to Palestine and will continue to extend humanitarian assistance to Gaza.
- Karpal Singh is pressuring PAS president Abdul Hadi Awang to take a final stand against setting up an Islamic state, as this was a precondition for cooperation between DAP and PAS in past elections.
- PKR has lodged a report regarding a slew of cases in order to test the Malaysian Anti-Corruption Agency. The report involves several top politicians such as Najib and Abudllah.


Business News
- Worries about job losses are circulating, with analysts expecting the manufacturing sector to be hit the hardest. This sector has already retrenched 13,677 jobs by Q3 in 2008, and more are expected.
- Bursa Malaysia fell by 39.98% in 2008.
- Muhyiddin plans to form a Malaysia-Egypt trade and investment committee to encourage business and to encourage the two countries to become trade gateways in their respective regions.

PHILIPPINES

THEMES
Financial News
- The Philippine Stock Exchange fell 49% in 2008, or P3.909 trillion.
- The government will likely surpass the 2009 deficit ceiling of $2.1 billion, significantly more than the original target of P40 billion due to higher expenses and poor revenue collections.
- The BSP says the balance of payments will fall below the projected $2.3 billion surplus this year.
- Malacañang is open to holding a summit with lawmakers, Cabinet men, and business leaders to discuss ways and means to create more jobs in the face of the global economic crisis.
- The Supreme Court has approved new rules on corporate rehabilitation that will help a financially-distressed company to survive.

2010 Election
- Prospero Nograles is calling for all pro-administration parties to support a common candidate in the presidential elections.
- It has been speculated that if Legarda loses the support of the NPC to Escudero she will simply move to another party as she has proven herself to be popular and able to bring in votes.

Mindanao News
- GMA has appealed to the Muslim community to help her administration bring peace to Mindanao.
- GMA has named Agrarian Reform Secretary Nasser Pangandaman, Mayor Adelbert Antonino of General Santos City, Ronald Adamat, and Iligan lawyer-businessman Tomas Cabili Jr. as new members of the Mindanao peace panel.

ADDITIONAL NEWS
Political News
- The bicameral conference committee agreed to increase the economic stimulus fund in the 2009 budget to $1 billion.
- Comelec has not submitted a supplemental budget for Congress to act on, which may cause problems in the process of implementing poll automation.
- Comelec remains paralyzed due to lack of quorum as its three commissioners have yet to be reappointed by GMA after their appointments lapsed over Congress’ Christmas break.
- GMA has declared she would push for a reformed Comprehensive Agrarian Program (CARP) law, though she has been criticized for not acting decisively to help farmers.
- The Department of Environment and Natural Resources will be undergoing a major reorganization in order to ensure more effective and efficient enforcement of environmental laws.
- The Philippines has abandoned the Joint Marine Seismic Undertaking, an agreement with China and Vietnam to explore the Spratlys.

Business News
- The Commission on Audit is expected to come out with the results of the review of Meralco’s books next month.
- The Department of Finance turned down a proposal by the PDIC to be exempted from all taxes.
- The BSP expects remittances from overseas Filipinos to hit a record $17.9 billion this year.
- The Department of Energy has awarded three pre-commercial wind power development contracts to Alternergy Philippine Holdings Corp.
- The NTC has rejected the application of Connectivity Unlimited Resource Enterprise to raise 3G service rates.

SINGAPORE

Business News
- The government predicted that the economy could contract by up to 2% in 2009, threatening its worst downturn in nearly 50 years and placing it near the bottom of Asian economic performance in 2009.

THAILAND

THEMES
The New Government’s Policies
- The Interior Ministry is drafting a plan to consolidate existing agencies to tackle the Southern insurgency. The new body will be overseen by council of ministers.
- Education Minister Jurin will push for implementation of the 15-year free education policy by next school year and to make reform his top priority.
- Korn said he expects interest rate cuts.
- Wannarat said the government will review a plan to raise the retail price of LPG.
- PM’s Office Minister said Democrats will not interfere with media and would seek to establish an agency to oversee NBTC formation and frequency allocation and also redirect NBT programming to be more neutral.
- The ICT Ministry announced the blocking of 2300 sites for insulting the monarchy
- Chalerm hosted an opposition meeting to discuss debating the Democrats’ platform, criticizing the new government for stealing Thaksin’s ideas.

Economic Indicators
- The BoT forecast 0.5-2.5% growth in 2009 as Abhisit unveiled an $8.6 billion fiscal stimulus plan. The cabinet will consider the proposal on January 13 before submitting it to Parliament on January 21.
- CPI rose 0.4% on year in December, but down 1.6% on month. In 2008, inflation rose 5.5%.
- The SET was up 0.73% on December 31 to close at 449.96. The SET closed the year down almost 48%, reaching its lowest point on Oct. 29. Shares jumped 6.39% on Monday in hopes of increased oil prices on Mideast tension.

Telecom Updates
- Mobile operators reported overall 2008 revenue growth was flat, far off expectations and 2009 would see subscribership growth fall.
- AIS will issue $214.7 million in bonds in early 2009 to raise capital.
- TRUE discussed its rights issue – 1 to 22.2 – for early February.
- MNP is one of key industry reforms NTC will push in 2009. This will require $20 million to establish a central clearing house; operators will be expected to contribute based on the size of subscriber base.

ADDITIONAL NEWS
Political News
- Thaksin gave an interview, saying Thailand’s judiciary has staged a coup, asking for a royal pardon and suggesting he will stay in the Middle East long-term.
- Thaksin told the UDD to keep fighting for democracy. Abhisit asked Thaksin to return and to reconcile for the country.
- Four UDD leaders were accused of lese majeste after their rally at Parliament last Monday.

Business News
- Carrefour is still committed to spending $57.5 million on opening 8-10 new stores in Thailand in 2009, despite the downturn.

VIETNAM

THEMES
Managing Growth While Containing Inflation
- Dung laid out a five-point plan to hit socioeconomic targets approved last year: boosting consumption and exports, ensuring social welfare and fortifying poverty alleviation, implementing efficient financial and monetary policies, and using flexible and timely management.
- The MOIT is targeting $72 billion in exports in 2009, up 13% on 2008’s $63 billion, though less than half of the 29.5% growth seen in 2008.
- The Ministry of Finance said prices may fall by half in 2009 to see December 2009 inflation of 8-9% on year.
- MoLISA said economic slowdown could cost 300,000 jobs in 2009, 0.65% of the labor force, with industrial sectors hardest hit.
- The Finance Ministry said reforming tax and customs procedures is the best measure to help enterprises. The Ministry will gather suggestions and amend the current framework.
- Nghe An province will be developed into an economic and educational center for the north-central region. DPM Nhan set a growth target of 10.5% in 2009. In 2008, the province met 18 of its 22 targets, with 10.6% growth.
- The VNAT unveiled a new campaign to slash prices and give tax cuts to operators and hotels providing discounts to foreigners in an effort to boost tourism in 2009. Tourist arrivals rose 0.6% in 2008 to 4.25 million, off the 5 million target. With its $1.5 billion budget, VNAT is seeking 4.5 million visitors in 2009.
- 2.65 million tourists visited Ha Long Bay in 2008, up 48.8% on year, with 1.71 million being foreigners, up 67.6%.

Building Infrastructure, Influx of FDI
- The Transport Ministry will inaugurate the Rach Mieu Bridge on January 19 to connect Ben Tre and Tien Giang provinces. Several other important bridges and highways in the South that will be completed in 2009.
- Vietnam will import 5 million tons of steel in 2009 to meet domestic demand for 10.5 million tons. Imports in 2008 were down 2% in volume, but up 29% in value on year.

Capital Market Development
- Dung asked the banking sector to focus on ensuring capital flows, transparency, administrative reforms and credit quality.
- SSC Chairman said foreigners should be allowed to own 49% of unlisted companies and 35% of banks to make these investments more attractive in the long term.
- Telecom operators and state commercial banks will be the focus of equitization in 2009: BIDV, Viettel and MobiFone have begun valuation with partners.
- The SBV aims to keep credit growth at 20% in 2009. Credit growth was 21-22% in 2008, below the bank’s cap of 30%.
- The VN-Index rose 2.51% on December 31 to close at 316.32. It was Asia’s worst performer in 2008, falling 66%.
- Agriseco, an Agribank subsidiary, raised $18.2 million from an IPO of 30 million shares on the HASTC yesterday.
- HSBC inaugurated the first wholly foreign-owned bank in Vietnam, HSBC Bank (Vietnam), and plans to have 10 branches by 2010.

Education Developments
- The government will build a $100 million Sci-Tech Univ at Hoa Lac High-Tech Park in Hanoi in 2009. It will be the first of four universities to be run with foreign partners and is due to open in 2012.
- On December 31, the MOET introduced the 14th Draft National Education Strategy, with the number of targets lowered from 74 to 50. The new draft strategy will increase competition among teachers and seek to improve capabilities, abolishing tenure and setting salaries based on performance.
- Vocational schools are complaining they can’t enroll students, a reality blamed on stigmas among students and poor management of schools themselves.

ADDITIONAL NEWS
Political News
- The 10th Central Committee opened the 9th conference on January 5, to review the implementation of previous resolutions. The conference will go until January 14.
- The NA said it will seek to increase ties with China. Bilateral trade reached $21 billion in 2008.
- The government launched a website on administrative procedures reform to collect public suggestions.
- The government fired the editors of Thanh Nien and Tuoi Tre.

Business News
- Mobile firms are launching discounts to increase subscribership rates; the MoIC will put out regulations to govern promotions in the near future.
- VNPT announced revenue of $3 billion in 2008, up 17.5% on year.